Does Your Business Need Payroll Software? 4 Questions to Ask
Like many small business owners, you may be at a crossroads: You've been manually handling payroll, or perhaps you’ve hired someone to take on this task. Is it time to invest in payroll software?
An intuitively designed, robust payroll solution offers relief for many small businesses, because it can automate functions that otherwise have to be handled manually, and it can reduce the odds of costly or time-consuming errors like over- or under-paying employees or filing incorrect tax amounts.
The following four questions can help you start determining whether it's time to invest in payroll software for your business:
1. Do you or your staff spend many hours during your workweek on payroll?
Handling payroll can be very time-consuming, especially if you're doing it manually. It can take up hours of your time; in fact, 11 percent of small business owners spend more than 10 hours per month on this task alone, according to a research from SCORE. Software can reduce the amount of time devoted to payroll by storing key information — so you don't have to reenter it — and perform calculations so that you don't have to do them manually.
2. Are you afraid you're wasting money?
While payroll software is a financial investment, it’s important to weigh that factor against the amount of time (and money) spent doing your payroll on your own. Don't forget that errors from doing payroll manually can also cost you money and time (see below).
3. Have you made payroll mistakes, or fear you will?
Payroll mistakes are no light matter. As of December 2015, 1.4 million employers owed approximately $45.6 billion in unpaid employment taxes, interest, and penalties, according to a report from the Treasury Inspector General for Tax Administration. Payroll software can help ensure you don't miss key tax-filing deadlines and that you're withholding and reporting the correct amount of taxes.
4. Is your payroll getting more complex?
As a business grows or gets more complex — such as taking on freelancers or paying employees overtime – the odds of making errors can increase. Payroll software makes it easy to manage the various classifications of workers, such as full-time and part-time employees, independent contractors, as well as exempt and non-exempt or employees who receive tips. It also helps you adhere to federal, state, and local rules for overtime pay as well as tax filing requirements.
If you answered "yes" to any of the questions above, it may be time to consider investing in payroll software. Keep in mind that you can get software designed specifically for a small business, but if you expect your business to grow, you should look for software that can scale with you.
Paychex offers payroll solutions to fit the needs of any size business with features you need to efficiently manage payroll at your business.